As the nation’s economic and employment engine the Randstad (the conurbation between Amsterdam, Utrecht and Rotterdam) is finished. Growth in jobs is mainly going to come from dynamic regions beyond the metropolises. Jouke van Dijk, Professor of Regional Labour Market Analysis at the University of Groningen, believes that the government should actually be spending more money in these regions. ‘The return on investment will be greater than in the Randstad’, says Professor van Dijk.

Jouke van Dijk

His view is that the present government under Prime Minister Mark Rutte is wrongly focusing on growth in the Randstad urban area. ‘The government appears to think that everything is concentrated in the west of the country, but that is a misapprehension’, says Jouke van Dijk. ‘We are seeing growth in jobs mainly in the regions beyond that. The area which extends from Brabant, through Utrecht, the Veluwe and Zwolle, extending as far northwards as South Friesland. Not only is employment growing faster there but labour productivity and wages too. As a result the urban centres in this geographical band have become vibrant centres of growth.’

Congestion

It is a development which began in the mid-1990s and is mainly linked to the increasing road congestion in the ever busier Randstad region. Due to this congestion the limits of growth have been reached in the Randstad and not only has employment shifted to less populous regions but people are also more often opting to live in these areas because of their desire to live in more pleasant surroundings. Professor van Dijk considers it to be a waste to continue to invest in new road infrastructure to reduce congestion in overcrowded areas as this is a problem which cannot be overcome.

‘At a certain point the relationship between job growth and economic density is no longer one to one, but tapers off’, he explains. ‘This is perfectly clear from the figures showing the relationship between job growth and economic activity in the Randstad and surrounding areas. Amsterdam still shows some growth in employment but in particular The Hague and Rotterdam are lagging behind.’

The New Way of Working

In addition, the average commuting distance – especially of highly-educated double-income families – is growing, he adds. A trend which is being reinforced by ‘The New Way of Working’ in which employees are less tied to a fixed place of work. ‘The shift in the organization of labour is certainly set to continue’, Professor van Dijk emphasizes. He points out that for the northern region, which is considered an attractive place to live, this is a favourable development.

The government would therefore do better to shift their focus towards investing in regional infrastructure, such as roads, railways and broadband internet, the professor argues. ‘The return on new infrastructure and creating a favourable economic climate would be much higher there.’ In this light Professor van Dijk is also surprised about the uncertain situation surrounding the closure of the tax office in Emmen. ‘The trend towards the concentration of government offices is not sensible and goes against developments like the new way of working. The tax officials who work in Emmen could, essentially, just work from home.’

Doubts about Top Sectors Policy

Besides his criticism of the government’s ‘Randstad focus’ Professor van Dijk has his doubts about its Top Sectors Policy. The professor believes it is based on incorrect assumptions. ‘It assumes that job growth takes place mainly in the industrial sector while growth in employment is mostly seen in the services sector. The cabinet is looking back to a post-war industrial policy, while the Netherlands today has little in the way of traditional manufacturing industry. The wages here are too high for that.’

The Top Sectors Policy is therefore fairly useless as a means of creating jobs, says Professor van Dijk. ‘The existing industrial jobs are often of a high-tech nature.’ The same applies in the services sector where the work in technologically advanced industries are highly knowledge based. That type of work is therefore mainly aimed at people with a higher level of education. ‘And these people are increasingly less tied to a particular place and have no need of assistance from the government,’ says Jouke van Dijk. ‘It would therefore be better to replace the Top Sectors Policy by one which is more aimed at developing the strengths of regions or cities. This would more closely match the demographic trends and developments in the labour market and could therefore help to solve some of the socio-economic problems in the regions.’ As Professor van Dijk sees it, a policy aimed at regions or cities would also be more in line in the EU’s new cohesion policy.

Modern jobs

To stimulate the labour market, more also needs to be invested in education Van Dijk believes. To reduce the school dropout rate and, more importantly, to change the nature of education. ‘We educate now for jobs which may not even exist in ten years’ time,’ he says. ‘Who would have thought a year or so ago that you could have earned a lot of money today as an Apps programmer?’ Education should be less job-oriented and more about being able to respond to future requirements in a flexible manner.’

Labour market shortages

The shortages on the labour market will only increase in the near future due to shrinkage, on the one hand, and the ageing population, on the other. Municipalities or the regions can take action in these areas, for instance by organizing the supply of education more efficiently or improving student transport from shrinkage areas to education centres, he argues.

A major problem however is that government spending cuts have greatly reduced municipal funding. At the same time, under the Employment Capacity Act (Wwnv), the local government is being asked to help those people who find it difficult to find work to find jobs. ‘The municipalities have no way of creating jobs for this group of people because they have no leverage there, certainly not in times of recession,’ says Professor van Dijk. ‘The results of this will be disastrous, certainly in shrinkage areas, and could even lead to municipalities going bankrupt.’

Curriculum Vitae

Jouke van Dijk (1956) is Professor of Regional Labour Market Analysis at the Faculty of Spatial Sciences. He studied economics in Groningen and has been associated with the University of Groningen since 1981. In 1986 he obtained his PhD with a thesis entitled ‘Migration and the Labour Market’. Professor van Dijk is an expert in the field of labour market issues and regional economics.

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